The Certificate of Need (CON) program is controversial in the healthcare industry. The program requires healthcare facilities to receive government approval before expanding, offering new services, purchasing medical equipment, and more.
CONs were instituted in 1974 as a means of achieving multiple goals in the healthcare industry, including: adequate supply of health resources, rural access to care, enhanced quality of care, provision of charity care, and other goals that aimed to reduce care costs and increase affordable, accessible care. At its highest point of popularity in 1980, only Louisiana did not require healthcare facilities to use CONs. As of September 2016, only 35 states and the District of Columbia still require the use of CONs—the lowest rate of participation since the program’s inception.
The Certificate of Need program was established based on the assumption that an overbuilding of healthcare facilities would lead to inflation of healthcare service costs. By seeking to regulate the expansion of hospitals and other facilities, health planning agencies would be able to determine a community’s most urgent, genuine needs and allow facility and service expansion accordingly.
However, critics of CONs claim that the regulations hurt patients by stifling competition and restricting the free market. A 2014 study by researchers at George Mason University found that CON laws are associated with fewer hospital beds and a limited supply of medical imaging equipment. States requiring CONs reported an average of 99 fewer hospital beds per 100,000 people. Of states that regulate acute care hospital beds and require CONs, there was an average of 131 fewer beds per 100,000 people.
Another George Mason University study from 2016 found that Certificate of Need programs were associated with 30 percent fewer rural hospitals per 100,000 residents, though the original CON program aimed to increase rural patient access. However, fewer facilities are not always equated with lower levels of access.
Like the original legislation stated, a greater number of facilities and hospital beds can lead to underutilization of services, causing care facilities to drive up prices in order to compensate for other losses. Price inflation could arguably hurt patients as much as a lack of facilities, as neither lead to accessible healthcare. In this way, hospital associations argue, CONs are still relevant in their protection of rural and safety-net hospitals.
Top CONs of 2017 by Project Amount
|Applicant||Application Approval Date||Project Amount|
|Decatur Urology Center||March 27, 2017||$140,351,451|
|Mercy Health System||June 22, 2017||$79,515,524|
|Carle Foundation Hospital||June 20, 2017||$66,812,449|
|OSF Center for Health - Streator||May 2, 2017||$32,545,000|
|AMITA Health||July 28, 2017||$28,773,901|
|AMITA Health||July 28, 2017||$26,523,383|
|Tidelands Health||February 27, 2017||$24,966,941|
|Silver Cross Hospital||June 26, 2017||$24,299,928|
|Pana Community Hospital||May 3, 2017||$20,346,262|
|Mercy Health System||June 20, 2017||$18,814,876|
Fig 2 Data from Definitive Healthcare
Definitive Healthcare has the most integrated, comprehensive, and up-to-date data on hospitals, providers, long-term care facilities and more. Our daily news feed provides the most recent CONs, RFPs, and exclusive updates on facilities and health systems across the United States.
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